News Update: Another reason for those who are planning to upgrade or buy a new vehicle. As per the statement of Union Minister Mr Nitin Gadkari, one can avail 5% additional rebate on the exchange of Old Vehicle under the Vehicle Scrappage Policy. The Voluntary Vehicle Scrappage Policy introduced during the Union Budget 2021-22 requires personal vehicles to undergo a fitness test after 20 years of registration.
5% rebate on exchange of Old Vehicle
An additional 5% rebate provided by the Auto manufacturers may influence the buyers to seek exchange benefits or upgrade. Additionally, people will benefit from the green tax and levies on old polluting vehicles. Which form a major part of the policy. The government will introduce automated fitness centers across the country, where vehicles must undergo mandatory fitness tests.
The Public-Private Partnership (PPP) scheme will establish automated fitness tests. The government shall aid the private partners and State Government for scrapping centre- stated the minister.
Authorities will impose heavy fines and confiscate vehicles if drivers use them after failing the automated fitness test. They will enforce this strictly to ensure the policy’s success. (Notifications of the Vehicle Scrappage Policy on fitness criteria to be notified in a matter of 2-3 weeks)
Ministry take on the Rebate Scheme
The minister stated that the policy is expected to benefit the sector. Further, given the stress from the pre- and post-pandemic impact. The automobile sector in India is projected to see a 30% boost. Especially, with turnover increasing from the current ₹4.5 lakh crore to ₹10 lakh crore in the coming years. Further, positioning India as a global automobile hub.
On implementation of the policy, scrapped items like, plastic, rubber, steel, aluminium etc. shall come in use for producing automobile parts. Further, resulting in cost reduction by 30-40%. This shall also increase the export by ₹ 3lakh cr. from the current ₹ 1.45lakh cr.
With the “Green Tax” already introduced, the government will notify the state governments under the Motor Vehicles Act to implement the green tax on polluting vehicles. However, the ministry is working on the Structure and framework of the scrappage policy – stated Mr. Giridhar Aramane – Sec. Road Transport and Highways
The ministry projects that a new investment of ₹10,000 crores will create 50,000 jobs.
Electric vehicles and strong hybrid vehicles running on fuels like CNG, LPG, and ethanol will be exempt from the green tax.
Green Tax implementation shall result in curbing pollution and protect the environment. The Ministry also stated of utilizing the funds collected via green tax in solving the pollution issues.
The Ministry sent the green tax proposal to the State government for consultation. Further, proposing a charge of 10-25% of road tax on vehicles older than 8 years during the renewal of their fitness certificate.
Whether the Vehicle Scrappage policy will benefit or add further trouble to the affected automobile sector will become clear in the future.
1 Comment